OTTAWA — Public sector unions and opposition parties are calling on the Conservative government to rein in “lucrative” pay schemes for executives of federal organizations, as the five top-paid executives at the Public Sector Pension Investment Board received more than $16 million in total compensation last fiscal year.

The Public Service Alliance of Canada (PSAC) and opposition NDP say the bonuses awarded to executives at the Public Sector Pension Investment Board (PSPIB) are far too rich for a Crown corporation, especially as the federal public service — which has already faced thousands of jobs cuts — battles the Harper government over wages and changes to pension plans and benefits.

Five senior executives at the Public Sector Pension Investment Board were awarded nearly $16.3 million in total compensation for 2012-13 — almost 50 per cent more than the $10.9 million granted the previous year. The federal organization invests funds for the federal public service, Canadian Forces and RCMP pension plans.

The large payouts came as the pension investment board posted strong returns last fiscal year, but also as the Conservative government trumpeted the need for financial discipline and scaled back some public service benefits, as it looks to eliminate a deficit estimated at $18.7 billion.

“These bonuses are outrageous and completely inappropriate at a time when public sector workers are dealing with job cuts and unilateral changes to pensions and benefits,” said PSAC national president Robyn Benson, whose group represents more than 180,000 people and is the largest federal public sector union.

She highlighted what she called a stark contrast: While the pension investment board executives are getting millions of dollars in performance payouts, the average public service worker receives $27,135 in annual pension benefits.

Gordon J. Fyfe, CEO of the Public Sector Pension Investment Board, was awarded an eye-popping $5.3 million in total compensation in the fiscal year ending March 31, 2013, including $500,000 in base salary, more than $1.7 million from the short-term incentive plan and $2.4 million from the long-term incentive plan, along with hundreds of thousands of dollars in other benefits. His total compensation in the previous 2012 fiscal year was $3.4 million.

The pension investment board reports to Treasury Board president Tony Clement, but the government stresses that it’s an independent arm’s-length organization. The PSPIB’s board of directors, which is appointed by the government on the minister’s recommendation, approves the compensation payouts.

“The more successful public sector pension investments are, the more affordable taxpayers’ contribution to federal pensions become,” said Matthew Conway, spokesman for Clement.

The payouts were tied to the investment board’s performance over the past four years, which saw $3.7 billion of value added to the pension funds over and above benchmark returns. The PSPIB, following a compensation review, has subsequently approved changes that will reduce the maximum potential payouts to senior executives.

Officials with the PSPIB say the incentive plans are “a pay-for-performance model” that only reward good performance.

But the PSPIB’s own reports show that in 2009 — following billions of dollars in losses to the pension assets amid the economic crisis — millions of dollars in incentives and other benefits were still paid out to executives. Fyfe’s total compensation alone was more than $1.4 million that year.

While a Crown corporation, the Public Sector Pension Investment Board does not receive a budgeted annual appropriation from government like many other federal organizations. It operates off of the returns it earns from pension plan investments, with the income allocated to federal pension funds to pay off the obligations owed to plan members.

Along with Fyfe’s hefty payout, two senior vice-presidents were awarded compensation totalling more than $3 million each in 2012-13, while two other vice-presidents received more than $2 million each in total salary and benefits.

All told, the pension investment board’s short-term incentive plan paid out almost $30 million to 404 employees in fiscal year 2013, a significant increase over the $18.8 million paid two years earlier to 317 employees. Also, the long-term incentive plan paid out $15.2 million last fiscal year to 55 employees, compared to $6.7 million to 42 employees the previous year.

The executive payouts were tied to the investment board’s strong performance over the past four years, which saw $3.7 billion of value added to the pension funds over and above benchmark returns, according to the organization’s annual report.

NDP treasury board critic Mathieu Ravignat said the compensation awarded to PSPIB brass is part of a “troubling” trend of lucrative bonuses paid to executives at federal agencies and deputy ministers within government.

Ravignat wants the government to lead by example and tighten the rules around how bonuses are paid to executives of Crown corporations and senior government officials.

Federal deputy ministers have received tens of thousands of dollars each in bonuses and other rewards for identifying thousands of public sector jobs that could be eliminated as part of the government’s spending cuts, he noted.

“It comes at a time when many Canadians are being asked to tighten their belts,” Ravignat said. “It calls into question … whether (the government) truly respects taxpayers’ money.”

The government can’t simply brush off the PSPIB payments as being handled by an arm’s-length organization when Clement appoints the board of directors that approved the compensation, he said.

Gregory Thomas, federal director of the Canadian Taxpayers Federation, said Canadians should be concerned about how far more lucrative the public service pension plans are for federal employees compared to the Canada Pension Plan.

“It’s stark when you draw the comparison and see how much wealth is backing up the retirements of government employees as opposed to the amount of wealth that is backing the retirement benefits of all Canadians,” Thomas said.

He believes PSPIB executives who are able to manage tens of billions of dollars of pension investments “can write their own ticket” because they’re highly sought after in their field.

Senior Parliament Hill reporter for the Ottawa Citizen, politics junkie, wannabe pro golfer and someone who has wordsmithed at newspapers in Ontario, Alberta and Saskatchewan. I've covered politics at... read more every level, including city hall in Ottawa and Calgary, the Alberta legislature in Edmonton and now back in Ottawa covering the Hill.View author's profile